March Investor Presentation

Transcription

1 March 2015 Investor Presentation

2 Safe Harbor Statement The following presentation includes forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of You should be aware that our actual results could differ materially from those contained in the forward looking statements, which are based on management s current expectations and are subject to a number of risks and uncertainties, including, but not limited to, our failure to successfully commercialize our product candidates; costs and delays in the development and/or FDA approval of our product candidates, including as a result of the need to conduct additional studies, or the failure to obtain such approval of our products or product candidates; changes in regulatory standards or the regulatory environment with any of our product candidates; our inability to maintain or enter into, and the risks resulting from our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of any products, including our inability to protect our patents or proprietary rights and obtain necessary rights to third party patents and intellectual property to operate our business; our inability to operate our business without infringing the patents and proprietary rights of others; general economic conditions; the failure of any products to gain market acceptance; our inability to obtain any additional required financing; technological changes; changes in industry practice; and one-time events. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company s filings with the Securities and Exchange Commission. Such documents may be read free of charge on the company s web site, or the SEC s web site at You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Pernix is a registered trademark of Pernix Therapeutics, LLC. Other trademarks referenced herein are the property of their respective owners Pernix Therapeutics Holdings, Inc.

3 Investment Highlights Rapidly growing specialty pharma company with strong CNS franchise Organic growth from enhanced promotion, pharmacy and managed care initiatives, and life-cycle management Launched Khedezla in April 2014 Re-launched Silenor in May 2014 Acquired Treximet in August 2014 Looking to expand into adjacent therapeutic areas, including pain and women s health Aggressive M&A, product acquisition and in-licensing pipeline Supplemented by life-cycle management to support organic growth Transformed financial profile: 2014 net sales of $121.7m, Adjusted EBITDA of $23.8m 2015 guidance of $230m of net sales, $95m of Adjusted EBITDA 3

4 $ in millions Accelerating Financial Performance A 2013A 2014A 2015E Revenue Adjusted EBITDA 4

5 Solid Growth Profile Three Months Ended 12/31 ($m) Twelve Months Ended 12/31 ($m) $60.0 $50.0 $53.8 $140.0 $120.0 $121.7 $40.0 $100.0 $80.0 $84.9 $30.0 $20.0 $10.0 $0.0 $23.9 $22.9 $1.1 Three Months Ending 12/31/13 Three Months Ending 12/31/14 $60.0 $40.0 $20.0 $0.0 ($20.0) ($5.7) $23.8 Twelve Months Ending 12/31/13 Twelve Months Ending 12/31/14 Total Adjusted EBITDA Total Adjusted EBITDA 5

6 Quarterly Adjusted EBITDA $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $0.0 ($20.0) 1Q Q Q Q Q Q Q Q 2014A 2014A 2015E 6

7 Financial Highlights Fourth quarter Net Sales and Adjusted EBITDA reflect record quarterly results Exceeded Net Sales guidance for FY2014: $121.7 million vs. guidance of $110 - $120 million Met Adjusted EBITDA guidance for FY2014: $23.8 million vs. guidance of $22 - $24 million Fourth quarter Net Sales of $53.8 million, an increase of 125% year-over-year Fourth quarter Gross Margin of 72.5% vs. 58.0% in the fourth quarter of 2013 Fourth quarter Adjusted EBITDA of $22.9 million vs. $1.1 million in the fourth quarter of 2013 Fourth quarter Adjusted EPS of $0.25 vs. $0.17 in the in the fourth quarter of 2013 Cash and cash equivalents of $34.9 million 7

8 Seasoned Management Doug Drysdale Chairman, President, CEO Alvogen, Actavis, Alpharma, Forest, Elan, DuPont Merck Rick Shalaby SVP Commercial Operations Merck, PDI, Amarin Terry Novak COO BMS, Innovex, DSM, Patheon, Alvogen Barry Siegel SVP General Counsel Buchanan Ingersoll & Rooney PC Sanjay Patel CFO Cantor Fitzgerald, Clinton Health Access Initiative, Sectoral Asset Management, UBS Alex Mironov SVP Corporate Development Alvogen, Inspirion, Pfizer, Ranbaxy 8

9 Transformed Specialty Platform (1) CNS franchise is a platform for business development Specialty sales force, repositioned and geographically optimized 100 territories Priority is highest ROI, chronic products Treximet, Silenor Legacy business of primary care and generic products supports infrastructure and provides operating leverage Significant business development opportunities in CNS and adjacent TAs Treximet Silenor Other 9 (1) Chart reflects net revenue mix for 2015E

10

11 Treximet Acquisition Total acquisition price of $252m financed with $220m debt and $32m cash Large market opportunity Treximet has 2% market share by volume Sensitive to promotion, not promoted since 2012 Serves an unmet need in migraine abortive therapy provides superior pain relief vs. placebo and vs. sumatriptan and naproxen components alone First-ever pediatric extension for adolescents submitted to FDA in November 2014 Commercial execution 100 specialty reps selling Treximet in 1 st detail position Focus on neurology and high-prescribing primary care audiences Price realignment effective September 2 nd Maintaining managed care coverage with no material changes to date Co-pay coupon and coverage assistance programs in place Positive initial response from physicians 11

12 Treximet Overview Fixed dose combination (85mg sumatriptan / 500mg naproxen) Launched by GSK in 2008 Bilayer tablet developed by POZEN with dual MOA Superior efficacy vs. component parts (faster onset of action, longer duration of pain relief) Attractive label Acute treatment of migraine attacks with or without aura in adults Once-daily oral dosing 4 Orange Book patents: 3 expire Aug. 2017; 1 expires Oct Anticipated pediatric exclusivity through Feb Opportunities for life cycle management post-loe 12

13 Treximet Trends (weekly Rx) 7,000 6,000 5,000 4,000 3,000 2,000 1, /14/14 3/14/14 4/14/14 5/14/14 6/14/14 7/14/14 8/14/14 9/14/14 10/14/14 11/14/14 12/14/14 1/14/15 Treximet TRx 13 Source: Symphony Health Source Pharmaceutical Audit Suite (PHAST)

14 January-14 February-14 March-14 April-14 May-14 June-14 July-14 August-14 September-14 October-14 November-14 December-14 January-15 Millions Re-Launch Underway No promotion since January 2013 Customer feedback: Physicians thought Treximet had been discontinued Pleased that Treximet is back Samples and access are priority Pricing realigned with competing brands Samples distributed starting November Focus on commercial payers $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 Monthly Retail Sales (1) ($m) Pernix sales from Sept ) Source: Symphony Health Source Pharmaceutical Audit Suite (PHAST).

15 Treximet Commercial Initiatives Added VP of Sales: Focused on sales performance and development New Campaign: Focused on more migraine relief and clear patient benefit versus single triptan agents Sales Professional Investment: National Meeting focused on putting the patient first and a greater emphasis on Treximet customers Consumer Engagement: Initiating robust program including national migraine survey results, Social Media, Advertising, Media engagement with celebrity spokeswoman, National Healthcare Provider and Real Treximet Patients Samples: First patient samples since 2011 in March Pernix Pharmacy Direct: Direct shipment programs in place nationally to reduce burden on patient Co-Pay Assistance: initiated a high-deductible co-pay card to counteract the typical high-deductible period of January and February 15

16 Pernix Pharmacy Direct (PPD) Program Gives physicians and patients control in dispensing of intended prescription without payer challenges Reduces access burden to Physician Offices and Patients $0 copay for most patients Multiple checkpoints that enhance safety and accuracy Delivered directly to patient s home Launched pilot in 4Q 2014 Fill rates in pilot territories have increased >25% Capturing incremental Rx s that were either switched to generics or lost due to high deductibles 16

17 Large Market Opportunity There were 14.8 million triptan prescriptions dispensed in 2014 Treximet has minimal market share snda filed for adolescent indication Migraine has 8% - 23% prevalence in children 11 or older 1% triptan market share gain adds $75m of net sales 2014 Triptan Prescriptions (millions) All Other Triptans, 14.6 Treximet, ) Source: Symphony Health Source Pharmaceutical Audit Suite (PHAST).

18 A Good Day Starts at Night

19 Silenor A Good Day Starts at Night Latest weekly TRx s are up 86% year over year and 75% since promotion began Latest weekly NRx s up 113% year over year and 98% since promotion began 100 sales territories covering 97% of target audience Consumer awareness is a priority in 2015 Many patients fear current treatment options more than their insomnia, but have still not yet heard about Silenor Non-personal HCP and Consumer promotion began Q Silenor included on Balancing Act on Lifetime television, December 2014 Managed care access has improved to include more than 60 million lives that now have improved coverage for Silenor 19

20 Silenor Re-launched mid-2014 Large market opportunity Silenor is the only non-controlled prescription sleep medication for people who have trouble staying asleep (the most common type of insomnia) Minimal competitive promotion and sampling Silenor will dominate share of voice within targeted specialty audience Majority of patents with insomnia are not treated with a Rx Issues with current prescription sleep aids Minimal sales force promotion of Silenor since 2011 Commercial execution Significant revenue growth potential through increased ethical promotion Expansion of Silenor communications to consumers Social media and public relations focus in Orange Book patents No generics expected until million covered lives recently added Market access programs initiated 20

21 1/3/14 1/17/14 1/31/14 2/14/14 2/28/14 3/14/14 3/28/14 4/11/14 4/25/14 5/9/14 5/23/14 6/6/14 6/20/14 7/4/14 7/18/14 8/1/14 8/15/14 8/29/14 9/12/14 9/26/14 10/10/14 10/24/14 11/7/14 11/21/14 12/5/14 12/19/14 1/2/15 1/16/15 1/30/15 2/13/15 Silenor Progress (weekly Rx) 3,000 Re-Launch 2,500 2,000 Silenor New Campaign & Sales Force Expansion Silenor Consumer Engagement 1,500 1, Total 6MG 3MG 21 Source: Symphony Health Source Pharmaceutical Audit Suite (PHAST)

22 Silenor OTC Development FDA guidance provides a clear path forward for OTC Silenor 3 years to NDA submission 15 month FDA review Reasonable OTC development costs of $10mm-15mm Label comprehension study Transient Study healthy subjects Actual use study Plan to partner commercial OTC launch 22

23 Silenor Commercial Initiatives Consumer Engagement: National Sleep Survey results to be announced during Sleep Week, Consumer Print Advertising, Media Event with Celebrity Spokeswoman, Patient videos, Sleep training and Media Tour On-line Presence: Social Media Launch, Search Engine initiatives, online Advertising & more National Presence: Presentation at American Academy of Sleep Medicine; exhibition at national and international congresses Sleep Burden: Education around sleep training for employers and other groups focused on positive impact of a good nights sleep Silenor Access: Pharmacy Direct Program, Samples and co-pay programs including high-deductible co-pay card 23

24 Development Pipeline Phase IV Studies Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Silenor Arousability (Observational) R&D Projects Begin Enrollment Study Completion Study Results Silenor OTC Pre-IND Meeting Request FDA Meeting Response Studies Begin Study Completion FDA Filing Approval & Launch Treximet Alternate Dose Pre-IND Meeting Request FDA Response/ Decision to move fwd Studies Begin Study Completion FDA Filing Approval Treximet Pediatric 24 PDUFA

25 Business Development Strategy Leverage Commercial Infrastructure Chronic vs. Acute Patient Compliance Pricing Power / Reimbursement Franchise Depth Leverage 100-person specialty sales force US products/assets in complementary therapeutic areas Preference for chronic-use / refill products De-emphasis on acute / single-use products Preference for compliant patient populations (e.g. women s health) Direct pharmacy to improve patient contact and follow-up Products that serve an unmet need Patient-types or products with price robustness 505(b)2 and novel development programs with long exclusivities Driving towards innovation, late-stage development 25

26 Summary 26

27 Achievements and Milestones Refocused organization on specialty markets Built industry-leading team Improved base business profitability Launched Khedezla April 2014 Re-launched Silenor May 2014 Re-launched Treximet September 2014 EBITDA positive 3Q14 Exceeded 2014 revenue guidance; 2014 Adj. EBITD in line with guidance Silenor OTC development initiation Treximet alternate dose development start Further acquisitions of complementary growth products 27

28 Reconciliation to Non-GAAP Financial Measures 28

29 Non-GAAP Financial Measures Pernix is disclosing non-gaap financial measures in this presentation. Primarily due to acquisitions, Pernix believes that an evaluation of its ongoing operations (and comparisons of its current operations with historical and future operations) would be difficult if the disclosure of its financial results were limited to financial measures prepared only in accordance with U.S. generally accepted accounting principles (GAAP). In addition to disclosing its financial results determined in accordance with GAAP, Pernix is disclosing non-gaap results that exclude items such as amortization expense and certain other expense and revenue items in order to supplement investors and other readers understanding and assessment of the Company s financial performance. Whenever Pernix uses a non-gaap measure, it will provide a reconciliation of non-gaap financial measures to the most closely applicable GAAP financial measure. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-gaap measures set forth herein and should consider non-gaap measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP.

30 Reconciliation of GAAP Net Loss to Adjusted EBITDA (in thousands) 3 Months Ended Year ended 12/31/14 12/31/13 12/31/14 12/31/13 GAAP net loss $(7,819) $(6,224) $(35,286) $(25,635) Interest expense, net 9, ,797 4,049 Depreciation and amortization 18,680 2,257 32,999 8,676 Income tax expense (benefit) (4,765) (13,090) (13,725) (20,756) EBITDA 16,060 (16,500) 2,785 (33,666) Net revenue adjustments 512-1,257 - Operating expense adjustments 6,289 31,651 19,804 40,285 Other income (expense) adjustments - (14,024) - (12,318) Adjusted EBITDA $22,861 $1,127 23,846 $(5,699) 30

31 Adjusted EBITDA Per Share (in thousands, except per share data) 3 Months Ended Year ended 12/31/14 12/31/13 12/31/14 12/31/13 Adjusted EBITDA $22,861 $1,127 $23,846 $(5,699) Basic adjusted EBITDA per common share Diluted adjusted EBITDA per common share Weighted average number common shares outstanding Weighted average number common shares outstanding dilution $0.60 $0.03 $0.63 $(0.16) $0.39 $0.03 $0.44 $(0.16) 38,250 37,156 37,871 36,444 58,445 38,093 54,792 36,444 31

32 Reconciliation of GAAP Net Loss to Adjusted Net Income / (Loss) (in thousands) 3 Months Ended Year ended 12/31/14 12/31/13 12/31/14 12/31/13 GAAP net loss $(7,819) $(6,224) $(35,286) $(25,635) Net revenue adjustments 512-1,257 - Operating expense adjustments 24,899 33,723 52,471 48,289 Other income (expense) adjustments 2,342 (13,850) 6,983 (11,023) Income tax expense (benefit) tax effect of above adjustments (5,385) (7,354) (15,567) (13,788) Adjusted net income / (loss) $14,549 $6,295 $9,858 $(2,157) 32

33 Adjusted Net Income / (Loss) Per Share (in thousands, except per share data) 3 Months Ended Year ended 12/31/14 12/31/13 12/31/14 12/31/13 Adjusted net income / (loss) $14,549 $6,296 $9,858 $(2,157) Basic adjusted net income / (loss) per common share Diluted adjusted net income / (loss) per common share Weighted average number common shares outstanding Weighted average number common shares outstanding dilution $0.38 $0.17 $0.26 $(0.06) $0.25 $0.17 $0.18 $(0.06) 38,250 37,156 37,871 36,444 58,445 38,093 54,792 36,444 33

34 THANK YOU